09, January 2018

The Central Government notified the Companies (Amendment) Act, 2017 (Amendment Act) on 3rd January, 2018. The provisions of this Amendment Act shall come into force on the date or dates as the Central Government may appoint by notification(s) in the Official Gazette

A few provisions in the Amendment Act have important bearing on the working of the Insolvency and Bankruptcy Code, 2016 (Code).

Key facts:

Section 53 of the Companies Act, 2013 prohibited issuance of shares at a discount.

The Amendment Act now allows companies to issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan such as resolution plan under the Code or debt restructuring scheme.

Section 197 of the Companies Act, 2013 required approval of the company in a general meeting for payment of managerial remuneration in excess of 11 percent of the net profits.

The Amendment Act now requires that where a company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, for such payment of managerial remuneration shall be obtained by the company before obtaining the approval in the general meeting.

Section 247 of the Companies Act, 2013 prohibited a registered valuer from undertaking valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during or after the valuation of assets.

The Amendment Act now prohibits a registered valuer from undertaking valuation of any asset in which he has direct or indirect interest or becomes so interested at any time during three years prior to his appointment as valuer or three years after valuation of assets was conducted by him.

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2.For carbon sink target, India looks at catchment area plan

Source: Indian Express

A carbon sink is a system that absorbs carbon dioxide from the atmosphere.

Having committed a target of creating an additional carbon sink the equivalent of 2.5 billion to 3 billion tonnes carbon dioxide by 2030, India now anticipates that it might not be able to meet that through forests alone.

It is now looking at the soil of catchment areas as an additional alternative; the Ministry of Environment and Forest is working on a landscape-based catchment treatment plan to bridge the gap.

Key facts:

India had made the 2.5-3-billion-tonne commitment for 2030 under the Paris Agreement.

The average annual increment of carbon stock is 35 million tonnes which is equivalent to 128.33 million tonnes carbon dioxide

MoEF officials said that by 2030, the increment is expected to be the equivalent of 1.92 billion tonnes of carbon dioxide, which would mean a shortfall of 0.6 to 1.1 billion tonnes.

Catchment areas, the alternative that is being planned, can be natural carbon sinks that, if properly managed, can sequester substantial amounts of atmospheric carbon dioxide in the form of organic carbon in the soil.

“65 per cent of carbon stock is stored in soil, and 35 per cent in trees” and a plan targeting catchment areas will prevent soil erosion, help recharge groundwater and help retain moisture in the soil that will deter forest fires.

Suggestions given by Experts

Mechanical interventions such as check dams, underground reservoirs or cement slabs that can channelise the rainwater further into the soil.

In other words, the ministry plans to “prevent forest fires by longer moisture retention in the soil, minimise human-animal conflict since such a plan will increase availability of water and fodder inside forests and recharge groundwater to make farmers happy”

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3.India rejects U.S. solar claim at WTO, explores new defence

Source: The Hindu

India has hit back at Washington’s latest legal assault on its solar power policies at the World Trade Organization, rejecting a US legal claim and exploring possible new protection of India’s own solar industry.

Issue:

Last month, the United States had triggered a new round of litigation at the WTO, arguing that India had failed to abide by a ruling that it had illegally discriminated against foreign suppliers of solar cells and modules. However, India said it had changed its rules to conform with the ruling and that a US claim for punitive trade sanctions was groundless.

Background:

It may noted here that, in 2014, the US dragged India to WTO on the country’s solar mission. The US alleged that India’s programme appears to discriminate against the US solar equipment by requiring solar energy producers to use locally manufactured cells and by offering subsidies to those developers who use domestic equipment. It also alleged that forced localisation requirements restricted US exports to Indian markets.

India had lost this case as the WTO ruled that India’s domestic content requirements under its solar power programme were inconsistent with the international norms.

National Solar Mission:

National Solar Mission, launched in 2010, aims to establish India as a global leader in solar energy by creating the policy conditions for its diffusion across the country as quickly as possible. The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022 and aims at reducing the cost of solar power generation in the country.

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